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2010 (5) TMI 765 - HC - VAT and Sales TaxWhether in exercise of revisional jurisdiction the Revisional Authority was competent to cancel the RC of the new firm or not? Whether on the facts and in the circumstances of the case there was sufficient material for cancelling the RC of the new firm by the Revisional Authority and that the Tribunal was right in upholding the order of the Revisional Authority? Held that - The Revisional Authority was competent to and there was sufficient evidence of concealment of material facts for cancelling the RC of the new firm in exercise of its revisional jurisdiction under sections 65 of the VAT Act and 7(4) of the PGST Act and the Tribunal was right in upholding the order of the Revisional Authority. Thus the questions of law raised in this petition are answered against the new firm and in favour of the Revenue. Present revision petition is dismissed
Issues Involved:
1. Competence of the Revisional Authority to cancel the Registration Certificate (RC) of the new firm. 2. Sufficiency of material for cancelling the RC of the new firm by the Revisional Authority and the correctness of the Tribunal's decision in upholding this cancellation. Detailed Analysis: Issue 1: Competence of the Revisional Authority to Cancel the RC The primary contention raised by the new firm was that the Revisional Authority lacked the jurisdiction to cancel the RC under section 65 of the VAT Act. The Revisional Authority issued a detailed notice and provided an opportunity for the new firm to be heard. It was argued that the Revisional Authority's jurisdiction is confined to the material before the Assessing Authority at the time of the original order, as per precedents like Banarasi Dass Talwar v. Deputy Excise and Taxation Commissioner and Rajendra Singh v. Superintendent of Taxes. However, the court found these precedents inapplicable to the present case. The court highlighted that the Revisional Authority has the statutory power under section 65 of the VAT Act to call for the record of any proceedings to satisfy itself as to the legality or propriety of such proceedings or orders. Additionally, under section 7(4) of the PGST Act, the Commissioner has the power to amend or cancel any certificate of registration if the dealer has violated any provision of the Act or for any other sufficient cause. The court concluded that the Revisional Authority was competent to cancel the RC of the new firm, as it had followed due process, including issuing notice and providing an opportunity for hearing. Issue 2: Sufficiency of Material for Cancelling the RC The second issue was whether there was sufficient material to justify the cancellation of the RC. The Revisional Authority found that the new firm had concealed material facts in its application for the RC. Specifically, it was found that: 1. The application form was incomplete regarding the disclosure of the interest of the proprietor/partner in any other business. 2. Rakesh Mahindra, a partner of the new firm, had concealed his interest in the old firm operating under the same name. 3. The concealment was intended to hide the tax liability of the old firm, amounting to approximately Rs. 1.85 crore. 4. The old firm was already operating at the same premises since 1952. The court held that the new firm obtained the RC by misrepresentation and concealment of material facts, which justified the cancellation by the Revisional Authority. The Tribunal's decision to uphold this cancellation was found to be correct, as there was sufficient evidence of concealment of material facts. Conclusion: The court dismissed the revision petition filed by the new firm, holding that the Revisional Authority was competent to cancel the RC and that there was sufficient evidence for such cancellation. The Tribunal's decision to uphold the order of the Revisional Authority was affirmed. The court also granted liberty to the new firm to apply for a fresh RC after removing the defects, with the Assessing Authority directed to decide the application on merits within two months.
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